Wednesday, December 19, 2012

W(8)_DI_IRR & ERR METHOD E.E.C.5.

         


1.     Problem recognition, definition and evaluation
Food business is never sleep.
Everyone in everywhere at every time consume food to keep alive and healthy. Water is the one biggest business prospect, since 75% human body is water and the average person drink 2-4 liters water per day. This blog will evaluate my three previous water business analyst using IRR & ERR method.
2.     Development of the feasible alternatives
As we remember the three of these are:
-                    - Selling Kangen Water™ machine
-          - Selling Kangen Water™ with invest on machine
-                     -  Selling Kangen Water™ with purchase water from other maker
3.       Development of the outcomes



4.     Selection of the acceptable criteria.
We will looking for the best choice and the most profitable option. This analyst using IRR and ERR method apply from Engineering Economy Book Chapter 5.
Spreadsheet solution and calculation ERR using  formula below:







5.     Analysis and comparison of the alternatives
According our calculation above, the result as below:


6.    Selection of the preferred alternative
Base on our conclusion business model option 2 is the most profitable choice with selling Kangen Water™ with invests on machine.

7.     Performance Monitoring & Post Evaluation of Result
For improvement & development, we can collaborates option 1 and option 2 together. Enagic as a maker of Kangen Water™ machine also have spectacular 8 point system to support this business.

Reference: 
         i.      Purdue online writing lab. Reference List: Electronic Sources (Web Publications). Retrieved from :
http://owl.english.purdue.edu/owl/resource/560/10/
       ii.      Enagic Kangen Water™, retrieved from: 
http://www.enagic.com  
      iii.      MAHAKAM Team, Blog posting weeks 4 – 6, retrieved from: 
http://aacemahakam.blogspot.com/2012/010/W4_DI_Bussiness Analyst 1
http://aacemahakam.blogspot.com/2012/010/W5_DI_Bussiness Analyst 2
http://aacemahakam.blogspot.com/2012/010/W6_DI_Bussiness Analyst 3
     iv.       Sullivan, G. William, Wicks, Elin M & Koelling, C. Patrick (2012). Engineering Economic 15th       Edition: Chapter 5 Evaluation a Single Project, pp. 198-208


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4 comments:

  1. Dr. PDGDecember 20, 2012 at 7:48 AM

    Awesome case study, Pak Irawan!!! BUT, I am still not convinced you understand the Cost Engineering Approach to solving a problem.

    The question I have is how did you end up choosing Kangan System from amongst all the other options?
    http://www.steripen.com/products

    http://www.nsf.org/consumer/drinking_water/dw_treatment.asp

    http://www.consumerreports.org/cro/water-filters.htm?loginMethod=auto

    http://www.lowes.com/cd_Water+Filter+Buying+Guide_854197011_

    http://www.tripletek.com/home-water-purification-systems.html

    Given that there are MANY other systems, where is your analysis which compared these other systems so you could narrow it down to Kangan?

    What I recommend for other blog postings, would be to turn to Chapters 6 and 14 in your Engineering Economy. Share with us what all the viable alternatives were for you to choose from. Then run both a FINANCIAL analysis and a MULTI ATTRIBUTE analysis and show us why you chose Kangan. (A single option)

    What I am looking for you to show us is how you followed the phase gate decision making process. (See handouts from Day 1, slide #88. Show us how you narrowed down all the possible alternatives to only a few and then down to the single one you chose above?

    Understand that I am not challenging the accuracy of your analysis, (which is very good) but the process you are following to select the "best" option(s) to analyze.

    BR,
    Dr. PDG, Jakarta

    ReplyDelete
  2. Irawan_NielDecember 20, 2012 at 6:36 PM

    Well received with many thanks Dr Paul.
    I agree with you that i missed some process before, my next blog posting will accordance with your suggestion.

    By the way, Kangen Water Machine from Enagic is not a water filter, this is approved as a medical device that produce 5 types of water.
    Kangen water is one of the product produced that give you water with properties asf: alkaline, anti-oxidant, & micro-cluster.

    http://www.enagic.com/technology_certificates.php

    http://www.drweil.com/drw/u/QAA400790/Is-Kangen-Water-Healthful.html

    I have seen remarkable result for my collage and family by drink this water.

    some examples:
    Dr. Hiromi Shinya: http://www.youtube.com/watch?v=_kH-btLnAvo

    CNN report: http://www.youtube.com/watch?v=_kH-btLnAvo

    In Japan: http://www.youtube.com/watch?v=uib_LGrfZHc

    You can find a lot of testimonies and info from youtube or google about this. I strongly recommended this machine/water for your health and the business opportunity is very interesting.

    see more information below:
    Kangen water USA presentation http://www.youtube.com/watch?v=5WYKz_y497I

    Warm Regards
    Daniel Irawan

    ReplyDelete
  3. Dr. PDGDecember 23, 2012 at 2:40 PM

    OK Daniel, understood, but either way, your analysis should have included other options of the same type.......

    In other words, your analysis should have shown in some way that this was the "best" based on any number of financial or other attributes.....

    Once you chose the Kangan as being "best value", THEN you could be doing what you are doing now.....

    Follow me?

    BR,
    Dr. PDG, Jakarta

    ReplyDelete
  4. Irawan_NielDecember 25, 2012 at 2:23 AM

    well noted Dr Paul

    Thanks & Regards
    Daniel Irawan

    ReplyDelete

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